'Leaver statement' for employees under PAYE plans

EMPLOYERS will be required to provide a "leaver statement" for employees instead of P45 and P46s as part of the PAYE real-time information (RTI) initiative, the government announced yesterday.

HM Revenue & Customs has published draft legislation relating to the RTI project, outlining a proposal that would require employers to report to the taxman every time an employee is paid. The government hopes this will improve the quality of data.

A briefing note explained that employers would issue a leavers statement in place of P45s and P46s. This could take the form of a final payslip. HMRC's impact assessment suggested this reform "is likely to cause some concern and disruption, particularly while RTI is new".

It also said that the payroll software would need to generate a reference number for every payment made to a single employee.

In the 2012/13 pilot year, the final RTI monthly submission will be treated as the equivalent of the P13/35 forms with regards to penalties. From 2013/14, penalties will be issued for any late monthly returns.